Safety measures to follow while buying a property
Acquiring a piece of property in India is a risky affair. One will certainly run the risk of being cheated in various ways. The sector in India has grown leaps and bounds. Its growth has brought with it certain complications. With the pandemic at our back, a lot many developers are coming up with enticing offerings and captivating townships. This article comes with a bunch of safety measures one shall follow to avoid being thrown away into the dark while in the process of acquiring a property. Along with certain considerations, as to what and where to buy, one shall also be attentive to avoid being trapped in an unending loop of treachery.
Thorough Background Check Of The Builder
One shall ensure that the builder and his firm shall possess all the necessary approvals and certificates to run a business. It is also advisable to sieve through the track record of the builder with the aid of their previous and prevailing projects. Their projects stand testimony for the promises they make and what they end up delivering. Hence one shall ascertain the veracity of their claims.
All the legal ramifications concerning the project being developed shall be attended to by procuring all the necessary permissions and compliances from the concerned authority.
Visit The Project Site
One shall visit the site on which the promised project is coming, to ascertain the authenticity of claims made over the concerned property being developed. Also, ascertain whether the site is bereft of any legal complications. Also ensure the documentation concerning the site is clean and straight, thus avoiding any legal complications in the future. One shall not be swayed by the promises and designs that the brochure portrays. There will be practical differences insofar as what the brochure carries and what gets executed on the ground. It is also advisable to strike a conversation with the people in the immediate surrounding to know the antecedents of the site thoroughly along with gaining some insights about the location.
Pay Attention To Project Amenities
Details regarding parking space, common plot, general stores, clubhouse, lifts, and emergency routes shall be acquired at the outset. The aforementioned details will help in calculating the net cost of purchase for the concerned property. These amenities will also add value to the property and ensure a sense of comfort for the dwellers in the future.
Plans And Approvals
One shall thoroughly go through the municipal plans approved by the local municipality. There are some stringent strictures and concessions provided in the plan and accompanying documents. The concessions approved by the municipality in the plans can be used by the builder to change a few things here and there, but not compromising on the overall structural conformity. Also look for public amenities that are provided in the vicinity like metro rail, bus stand, shopping mall, and other services alike. This will add value to the property and help gain more in times of ascertaining the asking price for the interested property and also help reap more while reselling the property.
An Eye On The Carpet Area
Carpet area is a precise expanse of land, confined within the walls of the house. One shall not be confused between the built-up/super built-up area with the carpet area. Because the built-up area will encompass the area concerning the staircase and lobby along with the carpet area. Thus the built-up area will be 25-30 percent more than the carpet area alone. One shall have a comprehensive understanding of the details concerning carpet, built-up, and super built-up area of the property.
Financing And Banking Aid
One shall get to know the financing pattern of the construction for the interested property. In India, most of the builders resort to banks for their financial needs. The pace of construction is directly correlated to the ease of financing by the banks and the initial payments that the interested customers make. With the introduction of RERA, project developers shall keep 70% of the money received from the interested customers as an initial tranche of payment in a separate escrow account, which precisely means that they are left with 30% of the money mobilized from customers for construction purposes. Thus the reliance on the bank for these developers is a must.
Precise Cost Structure
There are certain costs that are integral to arriving at the total and precise cost of the project. Some of them are, development fees, service tax, GST, number/preference of parking slots, and other fees concerning added amenities and services. Thus the precise cost of the project is a function of the aforementioned variables.
License And Affiliation
Proper documentation will help in establishing trust in the minds of the buyers. There is a critical set of documents that shall be scrutinized to gain clarity over the interested property. The documents that demand attention are the title deed and encumbrance certificate for ascertaining the legality of the interested land. A release certificate shall also be procured if the property is being kept for reselling. All the necessary approvals from the concerned local authorities are a must. One shall also ask for property tax payments receipt and other statutory compliance receipts.
Payment for acquiring a property could be done in different ways. One could make a down payment at the outset, once the decision is made to acquire the interested property. By doing so, it will obligate the seller to not commit for anybody, but for the person who made the down payment to sell the property. There are other technical payment ways, like time-linked payment, Flexi-payment, etc. the payment method shall be decided by the buyer in accordance with his/her financial convenience.
It is a transitory set-up, monitored by the trusted third party in the process of financial transactions between the buyer and seller. This mechanism is introduced to protect the interests of the buyer. A pre-agreed amount can only be passed on to the developer if proportionate development as predetermined is achieved. Thus ensuring equanimity in promised development and pre-agreed payments at different phases.
Quality Of Materials
The materials that ought to be used for construction shall be discussed and agreed upon at the time of entering the contract. The quality, quantity, and configuration shall be thoroughly discussed at the initial stages to avoid any complications at the later stage of the project development. Regular visits to the site will help ascertain, whether the usage of materials is as per pre-decided terms.
Project Delivery Date
The project delivery date shall be adhered to without fail. This date shall also be mentioned in the contract. There shall also be an associated penalty clause attached to the delayed completion of the project. This will keep both the developer and the property owner on their toes and attend to their commitments at different phases of development of the property.
Once possession of the property is ensured. It is advisable to get the property registered in the name of the legitimate owner, with the approval of the concerned authority.
There are various mechanisms that are instituted to protect consumer interests. If anything happens in the process of project development, that deviates from pre-agreed terms and conditions. The consumer is well-placed legally to take the developer to the court or any other forums or tribunals to seek justice. This will keep the developer on tenterhooks and keep them on track insofar as adherence to a predetermined contract.
RERA (Real Estate Regulatory Authority)
A very significant statutory move made by the government to protect the home buyers from treachery bestowed by the developers and builders. RERA is a much-needed regulator to keep a tab on miscreants in the real estate sector. Its regulatory authority encompasses every possible stakeholder in the sector ranging from builders, home buyers, agents, and landowners.
RERA inherently being a bureaucratic organization will come with a set of functional obligations like that of being an official repository for garnering information about the project being developed. It will also ensure that the escrow account is managed appropriately without any pecuniary discrepancy by whosoever is in charge of the same. It will also act as a consumer redressal forum for any grievances related to real estate.